267 F.

2d 439

P. LORILLARD COMPANY, Petitioner,

v.
FEDERAL TRADE COMMISSION, Respondent.
GENERAL FOODS CORPORATION, Petitioner,
v.
FEDERAL TRADE COMMISSION, Respondent.
No. 12665.
No. 12709.

United States Court of Appeals Third Circuit.

Argued February 6, 1959.
Decided June 4, 1959.
Rehearing Denied August 4, 1959.

COPYRIGHT MATERIAL OMITTED Cyrus Austin, New York City

(Appell, Austin & Gay, New York City, Frederick F. Mack, White Plains,
N. Y., Robert McCormack, Perkins, Daniels, McCormack & Collins, New
York City, on the brief), for petitioners.
Frederick H. Mayer, Atty., F.T.C., Washington, D. C. (Earl W. Kintner,
Gen. Counsel, James E. Corkey, Asst. Gen. Counsel, F.T.C., Washington,
D. C., on the brief), for respondent.
Malcolm A. Hoffmann, New York City (Rosenman, Goldmark, Colin &
Kaye, Ralph F. Colin, Geraldine B. Zorbaugh, Robert J. Dunne, Norman
Solovay, New York City, on the brief), for Columbia Broadcasting
System, Inc., amicus curiae.
Before KALODNER and STALEY, Circuit Judges, and STEEL, District
Judge.
STALEY, Circuit Judge.

We are asked by these petitions pursuant to Section 11 of the Clayton Act, 38

Stat. 734, 15 U.S.C.A. 21, to review and set aside two substantially identical

cease and desist orders issued by the Federal Trade Commission. The orders to
be reviewed were issued by the Commission against General Foods
Corporation and P. Lorillard Company,1 the petitioners, at the conclusion of
proceedings upon complaints which charged them with violations of Section
2(d) of the Clayton Act, as amended.2 These proceedings were had before the
hearing examiner upon stipulated records with annexed exhibits. The initial
decisions of the hearing examiner, which include cease and desist orders, were
adopted by the Commission without further opinion.3
2

The complaints charged the petitioners with having made payments to certain
broadcasting companies4 for the benefit of chain-store customers of petitioners,
thus providing broadcasting time "to the favored customers for said customers'
own advertising purposes." The payments thus effected were alleged to have
been made as compensation or in consideration for services or facilities
furnished by these favored customers in connection with the offering for sale
and the sale of petitioners' products. Further, it is averred that the benefits so
conferred on some of petitioners' customers were not made available on
proportionately equal terms to petitioners' other customers, in violation of
Section 2(d) of the Clayton Act, as amended.

The stipulated facts may be summarized as follows: In 1950 and 1951 the sale
of broadcasting time had become difficult, and the broadcasting companies
each developed promotional schemes to enable them to sell time to
manufacturers and sellers of grocery products. Although the companies devised
their plans independently they are substantially similar in content, providing for
in-store promotions as an inducement to purchase radio and television time.
The broadcasting companies negotiated contracts with certain grocery chains
whereby they covenanted to provide the chains with specified amounts of radio
or television time each week during the term of the contracts. The contracts
provided that the broadcasting time would be used by the chains only for their
own advertising. In exchange therefor the chain stores agreed to conduct a
specified number of weeklong promotional displays in their stores of products
sold therein. The products and dates were not specified in the contracts but
rather it was provided that they were to be agreed upon by the parties, the
broadcasting companies proffering suggestions, subject to the right of the
chains to decline to promote products not deemed by them to be suitable for
promotion in their stores. These contracts were made without any prior
commitment or agreement involving anyone other than the grocery chains and
the broadcasting companies. Following negotiation of this series of contracts,
the broadcasting companies solicited petitioners and other manufacturers and
sellers of grocery products to purchase radio or television time from them, and,
as an added inducement for such purchase, offered in-store promotions of

petitioners' products in the chain stores under contract. These promotional plans
were variously named "Supermarketing," "Chain Lightning," "Mass
Merchandising," and "Sell-A-Vision" and were promoted by means of
brochures and circulars stating the details of the offers. The leaflets indicated
that purchasers of a minimum amount of radio or television time would be
provided, at no extra cost, with a specific number of in-store promotions of
their products. The broadcasting companies stated in their brochures that they
were able to offer the displays as a result of the firm contractual commitments
which they had previously negotiated with specified chain stores. The circulars
also emphasized the size of the chains under contract, their annual volume, and
the percentage of the retail market that they controlled.
4

Petitioners entered into contracts for the purchase of broadcasting time, and,
although the contracts contained no mention of the in-store promotions and
specifically negatived any agreement other than that contained in the written
contract,5 they received the benefits of the plans as specifically set forth in the
brochures. In fact, in many instances, after notification of the proposed date of
a promotion, petitioners contacted the designated chain store for the purpose of
arranging the details of the in-store promotional displays. Without exception,
those of petitioners' customers who received radio or television advertising
time, pursuant to the contracts described herein, were grocery chains in
competition in the resale of petitioners' products with other grocery chains and
independent customers of petitioners in the same market areas. The latter
customers did not receive nor were they offered broadcasting time or anything
of value in lieu thereof.

Petitioners deny that they paid anything to or contracted with the broadcasting
companies "for the benefit of" a customer within the meaning of Section 2(d) of
the Clayton Act. Further, they deny having paid for or supported the furnishing
of broadcasting time to the chains and, lastly, deny having adopted or having
become a party to the broadcasting companies' sales promotions. It is readily
apparent that the arguments overlap and that their determination depends
largely upon the Commission's interpretation of Section 2(d) and the stipulated
facts.

It is appropriate to keep in mind that administrative interpretations of statutes

by agencies charged by Congress with their execution are recognized as having
peculiar persuasiveness and weight. National Labor Relations Board v. Hearst
Publications, Inc., 1944, 322 U.S. 111, 64 S.Ct. 851, 88 L.Ed. 1170; American
Airlines, Inc. v. Civil Aeronautics Board, 7 Cir., 1949, 178 F.2d 903; Miller
Hatcheries, Inc. v. Boyer, 8 Cir., 1942, 131 F.2d 283. As we recently stated in
St. Marys Sewer Pipe Co. v. Director of United States Bureau of Mines, 3 Cir.,

1959, 262 F.2d 378, 381, "Ordinarily, such constructions should be accepted by
the courts unless they could not be reasonably or soundly made under the terms
of the statute." The agency's interpretation, however, must be consistent with
the purposes of the statute for, as Justice Frankfurter states in the recent case of
United States v. Shirey, 1959, 359 U.S. 255, 79 S.Ct. 746, 749, 3 L.Ed.2d 789,
7

"Statutes, including penal enactments, are not inert exercises in literary

composition. They are instruments of government, and in construing them `the
general purpose is a more important aid to the meaning than any rule which
grammar or formal logic may lay down.' United States v. Whitridge, 197 U.S.
135, 143, 25 S.Ct. 406, 49 L.Ed. 696. This is so because the purpose of an
enactment is embedded in its words even though it is not always pedantically
expressed in words. See United States v. Wurzbach, 280 U.S. 396, 399, 50
S.Ct. 167, 168, 74 L.Ed. 508. Statutory meaning, it is to be remembered, is
more to be felt than demonstrated, see United States v. Johnson, 221 U.S. 488,
496, 31 S.Ct. 627, 55 L.Ed. 823, or, as Judge Learned Hand has somewhere put
it, the art of interpretation is `the proliferation of purpose.'"

The purpose of the section here involved was to eliminate all discriminations
under the guise of payments for advertising or promotional services, and
Congress employed language that would cover any evasive methods. This is
made clear by the statement of Congressman Utterback, chairman of the House
conferees, in explaining Section 2(d) and (e), as follows:

"The existing evil at which this part of the bill is aimed is, of course, the grant
of discriminations under the guise of payments for advertising and promotional
services which, whether or not the services are actually rendered as agreed,
results in an advantage to the customer so favored as compared with others who
have to bear the cost of such services themselves. The prohibitions of the bill,
however, are made intentionally broader than this one sphere, in order to
prevent evasion in resort to others by which the same purpose might be
accomplished, and it prohibits payment for such services or facilities, whether
furnished `in connection with the processing, handling, sale, or offering for
sale' of the products concerned." 80 Cong.Rec. 9418.

10

Petitioners' argument when analyzed and stripped to its essentials is basically a

plea for reliance upon technical rules of contract law. It asserts, in effect, that
since it was not a party to the contract between the broadcasting companies and
the chain stores and that since they preceded its contracts with the broadcasting
companies, there is nothing illegal or violative of Section 2(d) in the
transactions. On the other hand the Commission refuses to wear blinders and
insists that the series of contracts be viewed as a whole. Substance is lent to the

Commission's analysis by the presence in this case of a number of brochures or

circulars which were utilized by the broadcasting companies. Although it is true
that the petitioners' contracts with the broadcasting companies contained no
mention of the in-store promotions, they were prominently mentioned in the
brochures. These promotions were not only held out as inducements for the
purchase of broadcasting time by the petitioners, but were sought and utilized
by them.
11

The petitioners' position is bottomed on the assumption that in deciding

whether a violation of the statute has occurred the Commission must restrict
itself to an assessment of the consequences which flow from a written contract
by the application of formal principles which a court would be required to
apply in an action between the contracting parties. If, however, we keep in
focus the real question involved, that is, whether the petitioners have made
payments to someone which actually are of benefit to their customers and not
whether they have bound themselves to do so by a legally enforceable contract,
it is readily apparent that petitioners' position is untenable. Certainly, the legal
effect of the contracts involved may be relevant to the resolution of the real
issue before the Commission, but it does not follow that the Commission must
give to those contracts the effect for which the parties to them contend nor that
it cannot view them in the setting of all the other evidence relevant to the issue
before the Commission.

12

Petitioners contend here as they did before the Commission that they did not
pay or contract to pay to any third person anything of value for the benefit of a
customer. In support of this position, petitioners assert that a payment to or
contract with a third person is not made for the benefit of a customer within the
meaning of Section 2(d) unless the seller makes it with the intention of
benefiting the customer or has reason to know that some direct benefit to the
customer will proximately result therefrom. No authority for the former
proposition is cited, and in fact it conflicts with the statement of counsel for the
petitioners, Cyrus Austin, in his monograph entitled "Price Discrimination and
Related Problems Under the Robinson-Patman Act," revised edition, 1953,
wherein it is stated at page 116:

13

"It is no defense for a seller charged with a violation of either of these sections
[ 2(d) and 2(e)] to show that he furnished or paid for a service solely in his
own interest and not pursuant to any prior understanding with the purchaser.
These sections prohibit discrimination in merchandising allowances or services
irrespective of whether the making of the payment or furnishing of the service
was a term or condition of sale, or amounted to an indirect price
discrimination."

14

In accord, State Wholesale Grocers v. Great Atlantic & Pacific Tea Co., 7 Cir.,
1958, 258 F.2d 831, 837, certiorari denied sub nom. General Foods Corp. v.
State Wholesale Grocers, 1959, 358 U.S. 947, 79 S.Ct. 353, 3 L.Ed.2d 352.
This section of the Act does not concern itself with motive or intention. It is
only concerned with the consequences which flow from an act. If those
consequences eventuate, the act from which they result is forbidden. The
Commission, however, went further than required and found that "the
responsible officials of Respondent [petitioners] knew, or should have known,
when they entered into the plan presented to Respondent by the broadcasting
company, that Respondent, in adopting such plan, would be supplying the
consideration which would constitute compensation for the benefits to be
received by a few favored customers, to the prejudice of their competitors."
This finding is amply supported by the record.

15

A substantial portion of petitioners' argument is directed to refuting the

Commission's finding that they were the "sole financial support" of the
promotional plan. Reliance is placed upon one case State Wholesale Grocers
v. Great Atlantic & Pacific Tea Co., 154 F.Supp. 471, D.C.N.D.Ill.1957,
affirmed in part and reversed in part, 7 Cir., 1958, 258 F. 2d 831, certiorari
denied sub nom. General Foods Corp. v. State Wholesale Grocers, 1959, 358
U.S. 947, 79 S.Ct. 353, 3 L.Ed.2d 352. In that case A&P and three grocery
product manufacturers were charged with violation of Sections 2(d) and 2(e) by
purchasing substantial advertising in Woman's Day magazine, a wholly-owned
subsidiary of A&P. The court of appeals affirmed the dismissal of the 2(e)
charge but found that the payments for advertising of defendants' products in
Woman's Day violated Section 2(d). The rationale underlying the dismissal in
that case is founded on the conclusion that the payments for advertising could
not be held to represent a furnishing of a service to A&P. In addition to the
obvious factual differences between the two cases, it is worthy of note that the
court failed to cite or distinguish the line of cases beginning with Herbert v.
Shanley Co., 1917, 242 U.S. 591, 37 S.Ct. 232, 61 L.Ed. 511, where Justice
Holmes held that a single payment may indeed cover the cost of more than one
object. Also see Pittsburgh Athletic Co. v. KQV Broadcasting Co.,
D.C.W.D.Pa. 1938, 24 F.Supp. 490; M. Witmark & Sons v. L. Bamberger &
Co., D.C.N.J. 1923, 291 F. 776. The broadcasting companies are not
eleemosynary institutions and the Commission could well find from the record
that the grant of "free" broadcasting time6 to the chain stores was part of the
total transaction for which the petitioners paid. The fact that the charge for the
whole transaction was attributed to a particular item, to wit, petitioners'
advertising time, is not determinative. The Commission's conclusion that the
payments made by the petitioners to the broadcasting companies inured to the
benefit not only of petitioners, but also of the favored chains as compensation or

in consideration for the in-store promotions afforded petitioners' products has

warrant in the record and a reasonable basis in the law, and this court must
accept it. National Labor Relations Board v. Hearst Publications, Inc., 1944,
322 U.S. 111, 64 S.Ct. 851, 88 L.Ed. 1170.
16

Petitioners' last objection relates to the "sweeping" nature of the cease and
desist orders issued by the Commission. Clearly, the orders in the instant cases
go no further than that issued against the Ruberoid Company and specifically
approved by the Supreme Court in Federal Trade Commission v. Ruberoid Co.,
1952, 343 U.S. 470, 72 S.Ct. 800, 96 L.Ed. 1081. Also see Moog Industries,
Inc. v. Federal Trade Commission, 1958, 355 U.S. 411, 78 S.Ct. 377, 2 L.Ed.2d
370, affirming Moog Industries, Inc. v. Federal Trade Commission, 8 Cir.,
1956, 238 F.2d 43. The fact that these cases involved orders issued in the
language of Section 2(a) of the amended Clayton Act should give us little
pause, for Section 2(d) is much narrower in scope and therefore orders framed
in its language would be well within the permissible ambit of the Commission's
discretion.

17

The orders of the Commission will be affirmed.

Notes:
1

Additional and similar complaints had been filed against the following
companies: Groveton Papers Company, FTC Docket 6592 (order issued May 7,
1958); Pepsi-Cola Company, FTC Docket 6593 (dismissed on other grounds);
Coca-Cola Bottling Company of New York, FTC Docket 6594 (dismissed on
other grounds); Sunkist Growers, Inc., FTC Docket 6595 (consent order
issued); Sunshine Biscuits, Inc., FTC Docket 6597 (order issued May 7, 1958);
Piel Bros., Inc., FTC Docket 6598 (order issued May 7, 1958); Hudson Pulp &
Paper Corp., FTC Docket 6599 (order issued May 7, 1958)

"(d) That it shall be unlawful for any person engaged in commerce to pay or
contract for the payment of anything of value to or for the benefit of a customer
of such person in the course of such commerce as compensation or in
consideration for any services or facilities furnished by or through such
customer in connection with the processing, handling, sale, or offering for sale
of any products or commodities manufactured, sold, or offered for sale by such
person, unless such payment or consideration is available on proportionately
equal terms to all other customers competing in the distribution of such
products or commodities." 49 Stat. 1526, 15 U.S.C.A. 13

These cases involve common questions of law and fact. Inasmuch as they were
briefed and argued together, we see no necessity for separate opinions

The "broadcasting companies" referred to were the American Broadcasting

Company (ABC), National Broadcasting Company, Inc. (NBC), and Columbia
Broadcasting System, Inc. (CBS), the latter having submitted a brief in this
court as amicus curiae

The following clause appears in both the ABC and CBS contracts:
"This contract contains the entire agreement between the parties and is not
subject to oral modification." The NBC clause reads as follows:
"This contract constitutes the entire agreement between the parties relating to
the subject matter hereof and may not be changed, modified, renewed or
extended except by an agreement in writing signed by the party against whom
enforcement of the change, modification, renewal or extension is sought."

We agree with petitioners' counsel that "nothing here turns upon the fact that
the consideration which the broadcasting companies gave to the chains in return
for in-store promotions was in broadcast time rather than in money."

18

STEEL, District Judge (dissenting).

19

Had petitioner1 paid for the broadcasting time of the chains, either directly by
payments to the chains, or indirectly by payments to the broadcasting
companies independently of the purchase by petitioner of its own broadcast
time, the payments clearly would have been for the "benefit" of the chains
within the meaning of 2(d). The petitioner did not do either of these things.
But the Commission and a majority of the court hold that an identical
significance must be attributed to the payments which petitioner made to the
broadcasting companies in purchasing air time for itself.

20

A violation of 2(d) of the Clayton Act entails, among other things, the
following elements: (1) a discriminatory payment by a vendor for the benefit of
a customer, (2) in consideration for services or facilities furnished by the
customer to the vendor in connection with the sale of a commodity of the
vendor. Without both elements of benefit there can be no 2(d) violation. The
finding of the Commission that the in-store promotions offered by the
broadcasting companies induced petitioner to enter into its contracts with the
broadcasting companies implies that petitioner anticipated the receipt of a
benefit by way of instore promotions. This finding relates solely to the second

element of a 2(d) offense. The present point of inquiry is directed to the

existence of the first element of a 2(d) violation, viz., whether petitioner
made a payment for the benefit of the chains.
21

In determining whether the petitioner's payments to the broadcasting companies

were for the "benefit" of the chains within the meaning of 2(d), it is easy to
become bogged down in a semantic morass. The word "benefit" has various
meanings depending upon the context of its use. In a sense, every dollar which
the broadcasting companies took into their coffers during the time when air
time was being granted to the chains was for the benefit of the chains
regardless of the source of the income. Revenue was the life blood of the
broadcasting companies upon which their very existence depended and without
which the chains would have had no air media over which to advertise. The
Clayton Act, of course, is not concerned with this type of benefit. It is aimed at
discriminatory advantages which a vendor by virtue of his own conduct confers
upon a vendee, or, under certain sections of the Act, reciprocal advantages
which a vendor and vendee confer upon each other by virtue of their own
respective acts. Whether petitioner's payments to the broadcasting companies
were for the benefit of the chains must be gauged from this standpoint.

22

The contracts between the broadcasting companies and the chains under which
the chains received air time antedated the contracts between the broadcasting
companies and petitioner. The execution of the agreements by petitioner was
not a contingency upon which the right of the chains to air time depended. That
right had theretofore accrued; it was fixed, immediate and unqualified. Nothing
was required of petitioner or anyone else to bring into fruition the right of the
chains to air time save the performance by the broadcasting companies of their
contracts with the chains. Petitioner was in no way responsible for this. So that
on the face of the matter, the advertising which the chains become entitled to
receive the moment they put pen to paper with the broadcasting companies was
not the result of any payment by petitioner.

23

The Commission and a majority of the Court assert, however, that the separate
elements of the sales promotional plan initiated by the broadcasting companies,
i. e., the two sets of contracts, the brochures of solicitation, and the designation
of products for in-store promotions, cannot properly be given fragmentary
evaluation, but that each must be treated as an integral part of the whole. This
approach would be understandable if the broadcasting companies were
defendants and their activities were charged to be violative of the law. The
broadcasting companies stand at the hub of the transaction. It was their
correlating activities which gave to the plan whatever cohesiveness and
interdependence was inherent in it. It was their efforts which were responsible

for obtaining the in-store sales promotional rights from the chains. It was they
who chose the chains from which petitioner might make its selection for instore promotions. All this was done by the broadcasting companies without any
prior commitment, authorization, agreement, or understanding with petitioner.
This is a stipulated fact. So that no basis exists for the Commission's finding
that the broadcasting companies occupied an "agency" relationship to petitioner
through which petitioner in effect channeled payments to the chains in the
modified form of broadcasting time.
24

The conclusion of the Commission that the actions of petitioner were of

discriminatory benefit to the chains within 2 (d) intentment is not aided by
theorizing that the broadcasting companies would not have renewed their
contracts with the chains unless the sales promotion plan had been sufficiently
supported by the totality of suppliers, including petitioner, who purchased
broadcast time.2 This approach makes petitioner's violation of the Act depend
not only upon the contemporaneous actions of other suppliers but also upon the
subsequent actions of the broadcasting companies in renewing their contracts
with the chains when, so far as the record reveals, neither the suppliers nor the
broadcasting companies were subject to control by petitioner. Whatever benefit
the chains may have derived from this combination of events, is from
petitioner's standpoint, too vicarious and causally remote to enmesh petitioner
in the Act.

25

In the light of the peripheral relationship which petitioner bore to the plan, the
statement of the Commission that petitioner became a "party" to and "adopted"
the plan is meaningless. All petitioner did was to accept what the broadcasting
companies offered. Yet, under the Commission's concept of "benefit", petitioner
would be culpable under the Clayton Act even if it had not designated any of its
products for promotion by the chains. For under the Commission's view, it was
petitioner's payments to the broadcasting companies which constituted payment
for the air time allotted to the chains. The amount of petitioner's payments did
not depend upon whether it designated products for in-store promotions.
Petitioner's payments were the same in either case. The failure of petitioner to
designate products for in-store displays would have exculpated petitioner from
liability under 2(d), for the furnishing of services or facilities by a customer is
a sine qua non to a 2(d) violation.3 However, without the designation of
products for in-store promotion, petitioner's payments to the broadcasting
companies, under the Commission's reasoning, would clearly have rendered
petitioner liable under 2(d)4 for furnishing advertising discriminately to the
chains, and under 2(a)5 for indirect price discrimination in favor of the chains
if the effect had been monopolistic or destructive of competition. For unlike
2(d) which is aimed at reciprocal vendor-vendee benefits, 2(a) and 2(e) are

directed solely against unilateral discriminations by a vendor.

26

If the Commission's conception of "benefit" is adhered to, the only way in

which the petitioner could have escaped the toils of the Clayton Act during the
period when the broadcasting companies were offering in-store promotions
would have been either to forego completely advertising over the air through
the broadcasting companies offering the promotions, or to buy air time for all
of petitioner's customers on a basis proportionately equal to that on which the
broadcasting companies had allotted air time to the chains. Petitioner would
have found itself in this unhappy plight solely because of the contracts which
the broadcasting companies made with the chains for which the petitioner was
in no way responsible.

27

Carried to its logical limit, the decision of the Commission means that if a
common supplier of a vendor and vendee, without pre-arrangement with the
vendor, grants the vendee terms more favorable than the supplier has granted
other customers of the vendor, the vendor must stop dealing with the supplier,
give proportionately equal "benefits" to all of its other customers, or be
adjudged guilty of Clayton Act discrimination. This result would follow
regardless of how vital the commodities or services furnished by the supplier
might be to the vendor. A construction of 2(d) which carries within itself the
seeds of consequences so harsh, unreasonable and oppressive should not be
reached unless required by a clear Congressional mandate. This I am unable to
discern.

28

The foregoing views are not at variance with the cases which the majority of
the Court has cited. Herbert v. Shanley Co., 1917, 242 U.S. 591, 37 S.Ct. 232,
61 L.Ed. 511, and M. Witmark & Sons v. L. Bamberger & Co.,
D.C.D.N.J.1923, 291 F. 776 involved constructions of the Copyright Act.
Pittsburgh Athletic Co. v. KQV Broadcasting Co., D.C.W.D.Pa. 1938, 24
F.Supp. 490, was concerned with principles of unfair competition and the
Communication Act of 1934 in their relationship to interference with a
contractual right to broadcast baseball games. These decisions are scarcely
pertinent to a determination whether petitioner's payments to the broadcasting
companies were a "benefit" to the chains within the purview of the Clayton Act.
To the extent that State Wholesale Grocers v. Great Atlantic & Pacific Tea
Company, 7 Cir., 1958, 258 F.2d 831, may have application, it tends to refute
rather than to support the decision of the Commission.

29

It may be that the sales promotional plan of the broadcasting companies is

economically undesirable and that the broadcasting companies which
sponsored it are beyond the reach of the present law. But this is no reason for

making a whipping boy out of petitioner by affirming the far-fetched

conception of Clayton Act "benefit" which the Commission has adopted.
30

Judicial responsibility requires that a Court which sits in review of an

administrative order shall interpret the applicable statute and hold unlawful and
set aside any agency action not in accordance with law, 5 U.S.C.A. 1009(e).
In the fulfillment of that responsibility, I would set aside the order of the
Commission in each case and direct a dismissal of the complaints.

Notes:
1

General Foods will be treated as if it were the sole petitioner, for unless
otherwise indicated the petitioner Lorillard stands in no different position

The Commission "assumed" that without the support ofeither petitioner the
plan of the broadcasting companies would have been unprofitable and of short
duration. This assumption is based upon the Commission's finding that each
petitioner provided the "sole" financial support of the plan. This finding is
unsupported by any evidence and is untenable on it face. Actually, the plan was
availed of by eight other companies in addition to petitioner. (Fn. 1, Opinion of
the Court). ABC sold an aggregate of advertising under its plan of
$2,173,514.19, of which General Foods bought $157,211.01; CBS sold
$1,057,470.03, of which General Foods bought $182,497.12; and NBC sold
$1,247.468, of which General Foods bought $81,520.

If the mere right to designate products for in-store promotions (as distinct from
the actual designation) is deemed to be a service or facility furnished by the
chains to petitioner, then, under the Commission's interpretation of the Act, the
failure of petitioner to designate products would not have exonerated petitioner
from a 2(d) violation

Section 2(e) of the Clayton Act, 15 U.S. C.A. 13(e), reads:

"(e) It shall be unlawful for any person to discriminate in favor of one
purchaser against another purchaser or purchasers of a commodity bought for
resale, with or without processing, by contracting to furnish or furnishing, or by
contributing to the furnishing of, any services or facilities connected with the
processing, handling, sale, or offering for sale of such commodity so purchased
upon terms not accorded to all purchasers on proportionally equal terms."

Section 2(a) of the Clayton Act, 15 U.S. C.A. 13(a) reads in part:

"(a) It shall be unlawful for any person engaged in commerce, in the course of
such commerce, either directly or indirectly, to discriminate in price between
different purchasers of commodities of like grade and quality, where either or
any of the purchases involved in such discrimination are in commerce, where
such commodities are sold for use, consumption, or resale within the United
States or any Territory thereof or the District of Columbia or any insular
possession or other place under the jurisdiction of the United States, and where
the effect of such discrimination may be substantially to lessen competition or
tend to create a monopoly in any line of commerce, or to injure, destroy, or
prevent competition with any person who either grants or knowingly receives
the benefit of such discrimination, or with customers of either of them: * * *"